A quick, honest glossary of the terms you will meet in demand planning and inventory, defined the way we would explain them in a demo.
Predicting how much of each item customers will want, by period, so you can plan supply, inventory and cash around it instead of guessing.
How close forecasts are to what actually happened. wMAPE (weighted mean absolute percentage error) weights the error by volume, so the items that matter most count most; lower is better.
The probability of getting through a replenishment cycle without a stockout. A 99% cycle service level means that in 99 cycles out of 100, stock lasts until the next delivery; higher service needs more buffer.
The buffer you hold to absorb demand that is lumpier than expected and lead times that run long. Sized on real variability and your chosen service level, not a round number.
The stock level that triggers a new order. It covers expected demand over the lead time plus the safety stock, so you reorder before you run out.
The order size that balances the cost of ordering against the cost of holding stock, so you are not ordering too often or carrying too much.
Sales and operations planning: the monthly process that aligns demand, supply, inventory and finance on one plan everyone can act on.
Optimizing stock across the whole network at once, factories, warehouses, branches, rather than each location on its own, so buffers sit where they do the most good.
An approach where the same source data, settings, parameters and model version always produce the same number, and where any change in inputs or model version is traceable. That reproducibility is distinct from explainability, the ability to inspect the factors and assumptions behind a number; the point is not that a tool whose output changes is untrustworthy, but that identical inputs should give an identical, auditable result.
The cash tied up in the stock on your shelves. Right-sizing inventory releases that cash for the business without hurting service.
Catching stock that is going quiet before it dies, while there is still time to promote, discount or stop buying it.
How much your suppliers' delivery times swing around their average. The more they swing, the more buffer you genuinely need.
The proportion of demand units met immediately from stock on hand. It is a different measure from the cycle service level: it counts whether the customer actually got every unit ordered, not just whether a cycle avoided a stockout.
The way small swings in customer demand get amplified into bigger and bigger swings upstream, at the distributor, the manufacturer, the supplier. Better forecasting and visibility dampen it.
Sorting items by how much they matter, usually by value or volume, so your attention and your safety stock go where they earn their keep instead of being spread evenly.
Demand-driven material requirements planning: a method that places strategic stock buffers at key points and replenishes them from real consumption rather than a long forecast chain.
Picture your next S&OP meeting: one number on screen that nobody argues with. See it free, on your own data, in 45 minutes; and if it does not hold up, we part as friends.